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Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing overhead is $27,094 per month. The following information is available for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost 4,220 10,050 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Note: Round your answers to 2 decimal places. 1. Predetermined overhead rate 1. Variable element 1. Fixed element 2. Standard hours allowed for the actual production 3. Variable overhead rate variance $ 12,060.00 $ 26,400.00 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places. 3. Variable overhead efficiency variance 3. Fixed overhead budget variance 3. Fixed overhead volume variance per MH per MH per MH MHs

Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing overhead is $27,094 per month. The following information is available for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost 4,220 10,050 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Note: Round your answers to 2 decimal places. 1. Predetermined overhead rate 1. Variable element 1. Fixed element 2. Standard hours allowed for the actual production 3. Variable overhead rate variance $ 12,060.00 $ 26,400.00 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places. 3. Variable overhead efficiency variance 3. Fixed overhead budget variance 3. Fixed overhead volume variance per MH per MH per MH MHs

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 16E: Thomas Textiles Corporation began November with a budget for 60,000 hours of production in the...
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Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing overhead is $27,094 per month. The following information is available for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Note: Round your answers to 2 decimal places. 1. Predetermined overhead rate 1. Variable element 4,220 10,050 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zer variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places. 1. Fixed element 2. Standard hours allowed for the actual production 3. Variable overhead rate variance $ 12,060.00 $ 26,400.00 3. Variable overhead efficiency variance 3. Fixed overhead budget variance 3. Fixed overhead volume variance per MH per MH per MH MHs
Transcribed Image Text:Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing overhead is $27,094 per month. The following information is available for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Note: Round your answers to 2 decimal places. 1. Predetermined overhead rate 1. Variable element 4,220 10,050 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zer variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places. 1. Fixed element 2. Standard hours allowed for the actual production 3. Variable overhead rate variance $ 12,060.00 $ 26,400.00 3. Variable overhead efficiency variance 3. Fixed overhead budget variance 3. Fixed overhead volume variance per MH per MH per MH MHs
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